What Are Bylaws?

Business Knowledge

Bylaws are document in an corporation that contain rules and regulations of a company, It is a guideline for the company like how to work, how to handle issues etc.  Every company has there own set of bylaws which are prepared by its management, board of directors at the beginning of the corporation. These bylaws are also known as the incorporation.

The first and foremost task of every new corporation is to make corporate bylaws. Using bylaws an organization can handle all their issues and remove the problematic time which occurs because of the issue. If your issue is solved then your time will be saved, by this you can save time and increase the efficiency of the company. If your companies efficiency increased then you will able to achieve the desired goal. So it’s profitable also to have bylaws in the organization.

What kind of rules and regulation comes under the bylaws

  • Types of Rules and responsibility for shareholders, directors, and officers
  • Rules for the annual meeting
  • What Types of Rules are applicable to the transferring of the officers and directors
  • Rules for how to distribute stock for official use
  • Goal of the corporation
  • How issues will be managed
  • What are the duties of managers and owners
  •  How the selection of the directors will happen
  • Frequency of board meetings
  • Types of committees of the board of directors
  • Types of officers
  • Various corporation policies

Steps to create a Bylaws

  • Specify the need: Firstly corporations need to specify the need of the bylaws. Also, needs can be specified by the local authorities and the city administrators. You need a concerned form from the bylaws services of the city to confirm that the city has authority under the Municipal government act to create bylaws.
  • Counselor Support: If your need is identified by the public administrator, the public administrator will take the need to the counselor and you receive the counselor’s support. Everything will go level to level.
  • Is a bylaw the best solution: The city administrator sends you the notice about the motion and keeps an eye on the matter because you need to work with the public and stockholders. It is important that everything needs to clear and specific so that no confusion is made. So making or writing bylaws is the right decision for the organization.
  • Draft bylaw: If all the legal work is over and now you going to create bylaws for the organization then the law department of the city will help you and supervise you to create the bylaws.
  • Committee presentation: When the drafting of the bylaws is done then, you need to submit the report to the city administrator and the city administration presents their report to the bylaws Committee of Council. There are several committees, each committee is having its own councilors. Then the Committee meetings will be held and citizens are allowed to speak for their position and the duration is only 5 minutes. If you are speaking in the meeting, then you need to bring 35 copies of the information which you are going to share with the committee and all these copies are distributed and will be saved for the future as a record of the meeting. The city administration and the public will ask a question about the bylaws from each other.
  • Committee Support: After the presentation of the report, now the committee will vote in the favour of the bylaws. If they get maximum vote then the bylaws will go to the council for the official signature, and if not then the city administrator will further investigate the bylaws and do some modifications if required. After that, they will send the bylaws to the council.  
  • Final draft: If all the formalities of the committee done then the report goes to the council and the law department finalize the bylaws.
  • Council approval: When the report goes to the city council for approval then the council will ask few questions from the city administrators about the bylaws. All the debate is already done and now the council meeting will be held and in these meetings, citizens are not allowed to speak, and then the council will read the bylaws and give the approval.
  • Bylaw comes into existence : The bylaw comes into existence when the mayor signs the bylaws.​​​​​​​ after that bylaws will be legalized for the organization.

Why do we use the bylaws?

Bylaws are the blueprint on the organization what your company can do and what cant do in some situation. This also specifies how your company will run and how the organization manages everything. Bylaws can be used for the following reasons:

  • For Settling the disputes, If any occurred for any reason.
  • Making decisions towards the organization goal
  • Keep things start and simple similar to previous work
  • Avoid conflict and issues
  • Communication rules. How the internal communication will happen in the organization from lower to higher level.
  • Educate newly appointed and transferred directors and officers of the organization. So that the motive of the organization can be fulfilled. 

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